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bkb1956, Tax Preparer
Category: Canada Tax
Satisfied Customers: 3801
Experience:  Tax preparer with 20+ years of experience
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I have a Nevada LLC (with pass through taxation -

Customer Question

I have a Nevada LLC (with pass through taxation - transparent) and have a new client in Ontario. The client says he we would prefer if I open a subsidiary in Ontario and invoice him with that company, is it because there are tax benefits or incentives for companies in Ontario to reinvest in Canada with other local companies?

If that Canadian subsidiary is invoiced by the parent NV LLC for 100% of the sales, would it have any tax obligations? My understanding is 5%, is this correct?

Should I form an Canada ULC? Anything else I should consider before opening a Canadian company?

Submitted: 1 year ago.
Category: Canada Tax
Expert:  bkb1956 replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

To be honest, I am baffled that one of your clients believes he has the right to advise you on how to operate your business.

The following links contain excellent information regarding opening/forming a business entity in Canada:

I realize this is a lot of information, but I would urge you to review it before deciding to act on the whim of a client.

Please let me know if I can assist you further.

Thank you and best regards,


Customer: replied 1 year ago.

Hi Barb, thanks for getting back to me with the links but they don't really answer my initial questions. I was looking for advice as I have read various pages and need clarification.

Let me try to clarify.

Is it true that Canadian companies have incentives to work with other Canadian companies?

If I form a Canadian subsidiary with my American LLC as the parent, what are the tax obligations?

Customer: replied 1 year ago.
Relist: Answer quality.
Didn't provide an answer, just links to websites to find an answer.
Expert:  bkb1956 replied 1 year ago.

My research did not reveal any tax incentives for a Canadian company doing business with another Canadian company.

The following link contains information regarding possible tax liability:

Best regards,